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GM timetable faces a big glitch this week

Kansas City Star

Monday, July 6, 2009

Unsettled injury claims could delay the scheduled birth Thursday of a new General Motors Corp. under the automaker’s bankruptcy-court-approved reorganization.
Hundreds of consumers still have injury-related liability lawsuits against the company. They may yet seek a court stay to temporarily delay the sale of GM’s assets to a new company that would be freed of their claims.
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Consumer groups have cautioned that people injured by a defective GM product before June 1, when the automaker filed for bankruptcy, would have to seek compensation from the “old GM,” the collection of assets left after the sale, and would be less likely to receive compensation.
The new GM has agreed to assume liability for legitimate claims from accidents that happen after the court-approved sale, both from cars made by the old GM and ones made by the new company.
Bressler said claims arising from accidents while the company was in bankruptcy proceedings will have a priority claim on the old GM’s assets.
But Bressler said that leaves his group of injury claimants, whose accidents occurred before June 1, to stand in line with other unsecured creditors, who are expected to receive 10 cents to 20 cents for each dollar they are owed.
Joanne Doroshow of the Center for Justice & Democracy said in a statement the issue “is far from over.”
“It is morally reprehensible that GM will pay for injuries and deaths that occur after the bankruptcy process, but not for the hundreds of victims who have already been hurt by defective GM cars,” Doroshow said.

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